STATEMENT
of
COMMISSIONER ROBERT M. McDOWELL
FEDERAL COMMUNICATIONS COMMISSION
Before the
COMMITTEE ON ENERGY AND COMMERCE
SUBCOMMITTEE ON COMMUNICATIONS, TECHNOLOGY
AND THE INTERNET
UNITED STATES HOUSE OF REPRESENTATIVES
September 17, 2009
Mr. Chairman, Ranking Member Stearns and Members of the Subcommittee, it is
a privilege to appear before you today.
The FCC is an agency with new energy and new blood, and I am honored to be
serving there for another term. I look forward to working with my new colleagues, Julius
Genachowski, Mignon Clyburn and Meredith Attwell Baker, as well as my friend Mike
Copps.
With these new commissioners and new leadership, we have a perfect opportunity
to rebuild the FCC as we address the myriad communications and economic policy
challenges facing America. For some time now, I have been calling for reform of the
Commission’s structures and processes. To help spark discussion and progress, I wrote
open letters outlining reform ideas to both Acting Chairman Copps in January and
Chairman Genachowski in July. Additionally, we have shared ideas with each other from
the outset.
First and foremost, the FCC should be a more open and collaborative place where
all Commissioners are included in the idea formulation process early on, rather than just
21 days before a voting deadline. Towards this goal, immediately upon becoming Acting
Chairman, Mike Copps worked to make the Commission more transparent, collegial and
efficient, and I commend him for his efforts. Similarly, Chairman Genachowski has
started a new process of enhancing information flow and improving employee morale. A
tremendous amount of FCC reform work remains to be done, however. I look forward to
working with all stakeholders on this important endeavor, especially Members of this
Committee. For the sake of brevity, I have attached a copy of my open letter to
Chairman Genachowski as part of my testimony and I respectfully request that it be made
part of today’s record.
The FCC’s largest initiative of the year thus far, of course, has been the digital
television transition – which continues to this day. Prior to the June 12 analog cut-off
date, almost three million households were estimated to be unprepared. As of August 30,
however, 1.8 million of those households were ready – leaving only about 710,000
households without access to digital signals. In other words, 99.4 percent of U.S.
households are getting DTV signals in some way – over the air or through subscription
services like cable or satellite TV. Nevertheless, the Commission continues to work with
the private sector to help the remaining consumers connect to the digital age of television.
Similarly, we are working with broadcasters to resolve a few reception issues, mostly
involving the higher VHF channels. Overall, while I’m reluctant to declare victory yet,
the DTV transition went better than many had feared, thanks to the hard work of an
uncountable number of people, including our dedicated public servants, Mike Copps and
his team.
As we move forward, I cannot think of a more important time to be at the FCC.
Even though the American economy has been shrinking overall, our communications
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marketplace is vibrant, evolving and growing. Consumers have more choices among
more communications technologies, services and providers than ever before. For
instance, 157 million Americans watched more than 21 billion online videos during the
month of July alone -- a figure that is growing at a double-digit rate each month.
Consumers are watching those videos on an increasing number of platforms as well. For
example, nearly 15 million Americans watch video on their mobile devices, and that
number is growing at 50 percent per year.
Three years ago, the discussion of a wireless-only marketplace was just
beginning. Today, nearly one in five American households is wireless-only while the
majority of American consumers has a choice of five wireless carriers. At the same time,
23 percent of all businesses are expected to be wireless-only by 2012. America’s
wireless broadband market is leading the world by growing more than 400 percent during
the past three years.
Additionally, America has the fastest growing fiber-to-the-home market in the
world – with an annual growth rate of over 120 percent. Five years ago, less than one
percent of American homes had access to fiber. Today, that figure stands at 13 percent.
Since 2000, the number of high-speed lines in America has increased more than
1900 percent, from approximately 6.8 million connections at the end of 2000 to almost
133 million lines nearly nine years later. To grow that number further, American
businesses will spend up to $80 billion on new broadband infrastructure this year alone.
Few, if any, business sectors can make such a claim in this economy.
Certainly, our communications marketplace is far from perfect, and more must be
done to help make new technologies and services available to more Americans at
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affordable prices. As we prepare our congressionally mandated national broadband plan,
however, we should not just examine our shortcomings, but we should learn from what
we have done right as well. The information and communications technology (“ICT”)
sector is poised to lead our country out of the recession and into an era of sustained
economic prosperity, higher paying jobs and untold consumer benefits if the government
does not adopt policies that inhibit economic freedom and investment. America’s year-
over-year private sector investments in broadband dwarf any government-funded
broadband efforts throughout the globe. In recent years, the Commission has promised
that new broadband technologies would come to fruition as a result of our actions to put
into the hands of consumers the power of previously unavailable spectrum, such as the
700 MHz band. Market players, both large and small, will need even more capital to
build out the infrastructure needed to make that promise a reality. With this fact in mind,
whatever policies we adopt should help attract more private sector capital, not deter it.
Encouraging the flow of capital is the spark needed to restart America’s economic
engine.
As the broadband plan takes shape, it is my hope that the plan not take a heavy-
handed, top-down, command-and-control industrial policy approach in an attempt to
promote more broadband access and usage. Instead, I hope that it will be imaginative,
pragmatic, flexible and the next step in an open and iterative process that will make
helping unserved America its top priority. Our policies should encourage abundance and
competition to give consumers more choices, life-changing innovations and lower prices,
all while obviating the need for regulation and rationing. If we are truly committed to
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being data driven, and avoid cherry picking data to justify a predetermined outcome, we
can produce a useful template to produce constructive public policy.
In addition to reform and the broadband plan, the Commission faces a number of
other challenges. We are confronted with a skyrocketing Universal Service cost structure
that is unsustainable. We preside over an inefficient and outdated intercarrier
compensation regime. We should quickly gather more granular data to better analyze the
special access market. More than 1.3 million broadcast indecency complaints, some of
which are older than my children, lie ossifying in our headquarters. The
Communications Act requires us to review our rules governing media ownership again
next year. And during that review, as with all of our endeavors, we must be faithful to
the First Amendment and defend the freedom of speech. We still have work to do to
ensure technologies that operate in the unused television “white spaces” can come to
market and into the hands of consumers as quickly as possible. Likewise, we must work
with Congress to devise a solution for resolving the communications challenges faced by
our nation’s emergency response providers. And the list goes on.
In conclusion, America’s ICT sector is at a critical juncture. Our technological
and economic future could be brilliant if we, as policy makers, have the courage to make
the right choices. I look forward to working with Congress, Chairman Genachowski and
my Commission colleagues on important new policies that will encourage job-creating
investment, empower consumers and make America stronger and more competitive.
Mr. Chairman, Ranking Member Stearns and Members of the Subcommittee,
thank you again for the opportunity to appear before you today. This concludes my
statement, and I look forward to answering your questions.